Monday, June 3, 2013

There is no such thing as an enduring monopoly

One of the great myths that "everyone knows" is that absent government intervention, companies will create enduring monopolies that allow them to extract non-economic rents from consumers. That thinking was behind the hysterical actions of the government in the 90s to "break the Microsoft monopoly".  Far more powerful than government is the action of the markets themselves. Monopolies are simply not something that can be sustained without government assistance (e.g. the Post Office). It wasn't the government that cracked the Windows-Intel "monopoly". It was Google's Android OS. I predict it won't be long before government mounts a "Break the Google monopoly" campaign.

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